The Asian-North Atlantic Race for Greenland

Flags in Greenland.

Greenland is using the bargaining power of its natural resources and shipping routes with increasing self-confidence, especially with East Asian nations. Jan Nalakowski believes that if the West wants to stay in the game, it should readjust its attitudes towards the island and entice it with economic incentives.

By
Jan Nalaskowski
for Atlantic-community.org

Recently Greenland has demonstrated more political self-confidence. It also keeps attracting increased attention from international actors, even those not present in the Arctic before (Australia, China and South Korea). There are several factors responsible for this change in the island's status. The strategic importance of Greenland stems from its location in the Arctic, particularly with the existence of new shipping routes, which are exceptionally attractive for East Asian countries. What is more, Greenland is the natural laboratory for research on climate change, potentially useful to other countries in their response to modern challenges.

But most importantly, the island possesses enormous amounts of resources, including fresh water, oil, gas, uranium, iron ore and rare-earth elements. Empowered in 2009 with the Self Rule Act, Greenland is entitled to manage its own resources policy. As a consequence, some fear that the island will become a "Trojan Horse" for Chinese extensive investment in the rare-earth elements market.

Making use of granted autonomy and responding to the growing interest, Greenlandic government performs various political actions, trying to maximize prospective gains. This is a completely new situation, where lucrative resources potential can simply slip away from Denmark, Europe and the North Atlantic area. For example, the Greenlandic assembly voted in December 2012 in favor of relaxing regulations on mining firms. The plan to invite foreign investors to develop mining industry was further pursued by Prime Minister Kuupik Kleist, aiming to attract extensive, international interest. The mineral agreement with China met protests from the European Union, but in January this year Kleist refused to implement any preferential treatment for Brussels in exploiting rare-earth resources.

On the other hand, the new government of former opposition leader Aleqa Hammond has recently started to implement a more cautious political program. Aiming to assure Greenlandic employment, it emphasizes that foreign labor force should be minimized and therefore many drilling agreements will not further be concluded. It is believed that allowing extensive Chinese involvement could in the long run undermine attractiveness for investment in Greenland, as the rare-elements market is already monopolized by China.

Greenlandic political actions still occur in the legal framework set by Denmark (including immigration regulations) but the question of prospective sovereignty should be taken seriously. It means that the island can proclaim independence and then take any course of action in the sphere of foreign policy. By now the longer preparation process towards self-sufficiency has been chosen, but it should be remembered that state-building in Greenland will finally assume a declaration of independence. As a fully sovereign country, the island will need serious security guarantees, taking into account its enormous potential. Denmark and the European Union are perceived as natural stabilizers but recent Asian activities can change this perception. Therefore, non-European investment can be seen as economic instrument more attractive than the Danish safety net grants. What is more, only about 20% of Greenlanders feel that the island should seek closer ties with Denmark and the vast majority point out Canada in this matter.

The deepening of Greenlandic autonomy is a manifestation of Danish respect for democracy, human rights and rights of ethnic minorities. However, it is now in the interest of Europe and the North Atlantic states to create an attractive economic environment for the self-governing territory. As a rational actor Greenland realizes its enormous potential and tries to maximize prospective gains. For example, it recently announced opening commercial fishery of salmon, which caused anxiety for North American countries. In March former Prime Minister Kleist warned that Greenland would terminate its preliminary resources agreement with the European Union if the organization is not respectful to the island as its partner.

All these actions cause frustration for Europe and North America but the real motivation of Greenland seems to be rather to increase its bargaining power, not to let Asian countries overinvest in lucrative territory. The current coalition government points out the need to strengthen the international position of Greenland, including the place within overseas countries and territories system in the European Union. Therefore, Europe and the North Atlantic states should take the example of China and South Korea's diplomatic efforts and readjust their attitudes towards the increasingly self-confident Greenland.

Jan Nalaskowski is PhD Fulbright student at Graduate Program in International Studies, Old Dominion University in Norfolk, Virginia.

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Jan Nalaskowski is PhD Fulbright student at Graduate Program in International Studies, Old Dominion University in Norfolk, Virginia. In his research he focuses on separatist movements, European Union, game theory and modeling and simulation.